The acquisition of WA-baed Quadrant Energy last year for $US2.15 billion (around $A2.9 billion) continues to pay off for Santos and its shareholders with better quality revenue and earnings and yesterday, a near doubling in interim dividend.
Unlike its peer, Woodside Petroleum which revealed a weak June quarter performance, Santos yesterday reported record gas production in the second quarter thanks to a solid performance across its Western Australia gas assets.
With US oil prices in a bear market (that’s a 20% plus fall from the most recent peak), you’d think it would not be a good time to be talking up an oil field, especially in Australia. However, that’s what Santos has done.
Gas is back in the news - suddenly with Santos revealing a huge gas-rich find on the North West Shelf that will add to the company’s reserves in the area and help supply Western Australia (and others) for years to come.
UBS slightly reduces forecasts for oil prices through to 2021 but retains a long-term oil price at US$70/bbl, which is expected through 2022-24. The revised outlook for the next couple of years reflects a more subdued view on global demand, in line with economic forecasts.
December quarter production was in line although a large increase in realised prices meant revenue beat UBS estimates. The broker notes a good quarter for GLNG, but this was driven by gas purchase from QC LNG.